First, good luck. In Buffett's section, he wrote about how
they were both "forever grateful for the staggering advantages"
provided by being born in America.

Beyond luck, Munger says, Buffett focused on doing a few
things well and kept at it for 50 years. "Buffett was, in effect,
using the winning method of the famous basketball coach, John
Wooden, who won most regularly after he had learned to assign
virtually all playing time to his seven best players. That way,
opponents always faced his best players, instead of his second
best. And, with the extra playing time, the best players improved
more than was normal." Buffett copied this, putting great CEOs in
charge of important subsidiaries for stretches of time.

This "Berkshire system" then began to attract more and even
better subsidiaries and CEOs to the company. And the better
subsidiaries and CEOs then required less attention from
headquarters, creating what is often called a "virtuous circle,"
Munger writes. They have also become self-sufficient, meaning
that when Buffett eventually leaves, Berkshire will not collapse.

How Berkshire built up its casualty insurance portfolio is
also instructive. Munger recalls that Berkshire's insurance
subsidiaries initially outperformed the S&P 500. Berkshire's
ginormous income tax later reversed this. But because Berkshire
had built a system that allowed subsidiaries to flourish without
the heavy-handedness of headquarters or a "department of
acquisitions," Berkshire executive Ajit Jain could expand the
insurance subsidiary.

Buffett was an extremely patient investor. "For instance,
during his first ten years in control of Berkshire, Buffett saw
one business (textiles) move close to death and two new
businesses come in, for a net gain of one," Munger writes.